Video game retail chain GameStop Corp has let go its Chief Financial Officer, Mike Recupero, and will be making more job cuts in the near future as they try to turn their business around.
Actually, the Grapevine, TX-based company said that CFO Recupero will be leaving affter only about a year in this executive role. GameStop’s previous Chief Accounting Officer Diana Saadeh-Jajeh will replace him. She actually served as interim CFO early in 2021 when the activist investor (and current board chairman) fored out then-CFO Jim Bell.
For the most recent quarter, ending on April 30, GameStop reported a net loss of $157.9 million. This is drastically different from the $66.8 million they reported during the same period one year ago. On the other hand, GameStop also posted $1.38 billion in net sales during the first quarter of this year; which has improved from the $1.28 billion in net sales the company posted in Q1 2021.
The persistent financial disparities have impacted share price, which dropped nearly 7 percent, to $128.25 near the end of the first week of June.
These dramatically incongruous numbers serve to indicate just how much GameStop has struggled the past few years. Indeed, profits have suffered at the brick-and-mortar video game media franchise thanks to changing preferences among consumers. While the shift to digital media has been steadily increasing, the isolation of the pandemic has probably exacerbated the overall consumer migration to the format; and GameStop has had to revamp its business model to keep up with the change and depend less and less on physical stores.
In this regard, the company said, “This means eliminating excess costs and operating with an intense owner’s mentality. Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results.”
To address these high costs and other operational complications, GameStop has also said it plans to make a “significant investment” in-store leadership as well as their other workers, the details of which should come within the next few weeks. While there is definitely the talk of more layoffs, the company reassures they are “not major” as they have been limited to the corporate organization.
